Production from the Galata Gas Field Commences

Production from the Galata Gas Field in the Black Sea, offshore Bulgaria, has now commenced. Daily sales volumes for June are expected to be 26.5 MMcfpd (equivalent to 4,400 boepd), increasing to in excess of 50 MMcfpd (8,300 boepd) in the peak winter months.

Commenting on this, Robert Adair, Chairman, said:

'First production from the Galata Gas Field is an important milestone for Melrose and the Issue will enable us to step up our exploration activities in Bulgaria with two exploration wells scheduled for later this summer. The first well will target a prospect, the Varna West, in the Galata trend. The second well will target a structure in the Oligocene channel which extends from Block 91-III into Block Kaliakra 99.

Melrose has 100% working interests in the Galata Gas Field, Block 91-III and Block Kaliakra 99.

The Galata Gas Field has Proved reserves of 65 Bcf (62 Bcf net to Melrose) and Proved and Probable reserves of 90 Bcf (83 Bcf net to Melrose).

Production from the Galata Gas Field is being sold under a 'take-or-pay' contract with Bulgargaz, the state-owned gas distribution and supply company.